Rising costs for Russian contractors

12th of March 2014

Oleg Popov of Cristanval explains how new Russian migration laws are affecting the sector, considering that 85 per cent of Moscow cleaners are foreign.

At the beginning of 2013, President Vladimir Putin introduced the idea of changes in migration laws. Following unrest in the Moscow region of Birulevo resulting from the illegal activities of a foreigner, changes were brought about quickly. Documents were checked in places where foreigners gather – markets, supermarkets, train stations, and airports. Power structures were reviewed for two months.

Changes were made in legislation regarding the responsibilities of foreigners in Russia. Fines were increased for lack of registration and work permits, and they are now anywhere from 100 to 200 euros. Besides the increase in fines in Moscow, the Moscow Region, St Petersburg and Krasnodar, the mandatory deportation of offending foreigners from Russia was implemented. In other regions around Russia, the courts are allowed to impose fines without deportation.

The Federal Migration Service (FMS) is allowed to prevent a person’s entrance into Russia. If a foreigner in Russia has committed two or more violations within one year, they can be barred from entering the country for two to seven years. This can be any type of violation, including, for example, traffic violations.

Sometimes this is seen at customs when a person attempts to leave Russia, and at other times when they attempt to return. In total, according to the FMS, in 2013, 63,000 migrants were deported, and another 400,000 were barred from entering the country.

Furthermore, fines were increased for legal entities. In the past, they amounted to 3,000 to 16,500 euros for hiring a person without the proper work permits. Today they are 16,500 to 31,500 euros.

Since December 1 2013 the procedure has changed for foreigners residing in Russia. In the past they could stay up to 90 days, leave the country, and return immediately. Now, they may stay up to 90 days but are then required to leave for 90 days before returning. A longer stay requires permanent or temporary residency, or legalisation – the receipt of a license or work permit.

President Putin’s new initiative for the expansion of the licensing system to foreign workers in commercial firms (currently, a work permit is required) should make the situation more understandable and civilised. The fundamental decision on its introduction has already been made, but whether it will work depends on the details.

Following the strengthening of legislation and the beginning of mass document-checks, foreign workers have begun demanding higher pay. This is partly due to the decreasing number of foreigners. Many are voluntarily leaving for their home countries. They also understand that they are doing their work more effectively than those from Russia.

The labour productivity of any migrant from Central Asia is three times that of a Russian. In fact, a cleaning woman from Central Asia can clean 1,500 square metres in a day, while a Russian can clean a maximum of 600.

The rising cost of foreigners’ services may bring with it rising costs of contracts with cleaning companies. The rising cost to cleaning clients, whether a retail chain or business centre, will ultimately mean an increase in the cost of their products and services to the final customer.